US Sanctions Waiver and Implications for India
The United States has decided not to renew a one-month sanctions waiver that allowed the purchase of Russian and Iranian crude oil, as stated by American Treasury Secretary Scott Bessent. This decision is significant for India, which had increased its purchase of Russian oil amid the West Asia conflict.
Implications for India
- Indian refiners plan to continue buying Russian oil from non-sanctioned suppliers and vessels.
- The US waiver had permitted countries to purchase oil stranded at sea before March 11, which expired on April 11.
- Prashant Vasisht from Icra noted that Indian refineries have maintained operations despite a supply crunch caused by the West Asia crisis.
Oil Import Statistics and Trends
- India's imports of Russian crude increased to a nine-month high of 2.06 million barrels a day in March, up from 1.06 million barrels in February.
- In April, imports stood at 1.67 million barrels a day for Russian oil and about 258,000 barrels a day for Iranian crude.
Strategic Shifts and Economic Impact
- Russia has offered to increase supplies of crude oil and liquefied natural gas to India.
- Indian refiners are now paying premiums of $6-7 a barrel for Russian oil, compared to earlier discounts of $8-10.
- India’s reliance on Russian crude marks a reversal from its earlier strategy of reducing purchases under US and EU pressure.
Historical Context
- Since December 2025, India had reduced imports from Russia amid trade negotiations with the US.
- In February, the US announced an interim trade agreement with India, lifting a 25% tariff on Russian oil purchases.
- Despite pressure, India continues to buy Russian crude, potentially importing liquefied natural gas and petroleum gas.
- India’s crude oil import dependence has risen to nearly 90% due to robust demand and stagnant domestic output.
